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PART C: ACCOUNTING AND REPORTING SYSTEMS, CONTROLS AND COMPLIANCE 
 
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Salary systems 
(ie a monthly paid payroll) are similar to those for wages but it is usual for the monthly 
salary to be generated by the computer from details held on the master file and therefore (with the 
exception of overtime, bonuses, etc) there is no need for any transaction input. So the inputs for a salary 
system are just overtime, bonuses, etc (because the basic salary is already on the master file). 
6.1.3 Processing in a payroll system 
The primary action involved in processing a payroll is calculating an employee's gross pay, calculating 
and implementing the various deductions in order to find net pay, and then making payment by the 
appropriate method. 
In the case of wages, this means taking the input data on hours worked and pay details, and calculating 
the weekly wage due to the employee. The same calculation is carried out every week. 
In the case of salaries, payroll processing might just mean picking an option to pay all the monthly paid 
employees the same amount as they received the previous month. This could happen in theory, but in 
practice there are usually some amendments to make to the monthly pay details, and these are 
implemented during payroll processing. 
6.1.4 Outputs from a payroll system 
Typical outputs in a payroll system are: 
(a) Payslips 
(b) 
Payroll (this is often a copy of the payslips) 
(c) 
Payroll analysis, including analysis of deductions (tax, national insurance, etc) and details for 
costing purposes 
(d) 
Various forms required for income tax purposes 
(e) 
Coin analysis, cheques, credit transfer forms 
(f) 
Electronic payment through the BACS system 
Segregation of duties within the payroll department is particularly important. Well-planned fraud, such 
as the payment of 'ghost' employees, then requires collusion involving two or more people, and is 
consequently less likely to take place. 
The most important aims of the control system relating to wages and salaries are: